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The International Monetary Fund said regulatory proposals might seriously damage securitisation markets, which are "critical" to the broader economic recovery. "As these proposals currently stand ... may be so blunt that they will either be ineffective at providing incentives for better securitiser behaviour, or alternatively may further slow the market recovery, effectively closing it under some configurations of portfolio characteristics and economic conditions," the IMF said.

The International Monetary Fund said banks worldwide have yet to disclose all of their likely losses as a result of the financial crisis and economic downturn. The IMF lowered its estimate of total losses, reflecting an improved economic outlook and increasing confidence in the financial market. However, the IMF said recovery is not ensured, and more needs to be done to prevent another downward lurch in the economy.

The International Monetary Fund said banks worldwide have yet to disclose all of their likely losses as a result of the financial crisis and economic downturn. The IMF lowered its estimate of total losses, reflecting an improved economic outlook and increasing confidence in financial markets. However, the IMF said recovery is not ensured, and more needs to be done to prevent another downward lurch in the economy.

From securitisation to credit rating agencies, leaders from the Group of 20 nations vowed in April to tackle a range of issues to stabilise the financial industry. Those leaders are preparing to meet in the US for the next G-20 summit, offering an opportunity to review any changes that have been made, although most are not set to be implemented until later this year or next year.

The euro zone could allow Central and Eastern European countries to join by relaxing its entry rules, the International Monetary Fund said, and those nations should considering adopting the euro. "For countries in the EU, euroisation offers the largest benefits in terms of resolving the foreign currency debt overhang [accumulation], removing uncertainty and restoring confidence," the IMF said. "Without euroisation, addressing the foreign debt currency overhang would require massive domestic retrenchment in some countries, against growing political resistance."